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☆ Texas Sues G.M. Over Collection and Selling of Driver Data
▼ + stars: | 2024-08-13 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

The state of Texas sued General Motors on Tuesday, accusing the automaker of collecting detailed driving data on 16 million drivers and selling it to insurance companies without their consent. “Millions of American drivers wanted to buy a car, not a comprehensive surveillance system that unlawfully records information about every drive they take and sells their data to any company willing to pay for it,” said Ken Paxton, the state’s attorney general. spokeswoman said the company had been “in discussions” with the attorney general’s office and was reviewing the complaint. “We share the desire to protect consumers’ privacy,” she said. Many customers’ insurance premiums soared because of the data contained in those reports.

Persons: ”, Ken Paxton, Paxton Organizations: General Motors, The New York Times, Motors Locations: Texas

Stubborn inflation is taking a toll on the nation’s largest banks. On Friday, JPMorgan Chase and Wells Fargo released earnings that were stuttered with indications that despite recent signs of cooling inflation, the economy continues to be a drag. The bank reported profit of $4.9 billion, down slightly from a year earlier, on revenue of $20.7 billion, up 1 percent from last year. On one hand, the nation’s largest bank pulled in $13.1 billion in profit, but it concurrently disclosed more than half a billion dollars in losses from having to offload sinking mortgage investments, among others. Overall results were bolstered by its investment banking and trading business, and a one time windfall from the sale of shares in Visa.

Persons: Wells, Wells Fargo’s, —, ”, Charles W, Scharf Organizations: JPMorgan Chase, Visa

☆ Student Loan Borrowers Owe $1.6 Trillion. Nearly Half Aren’t Paying.
▼ + stars: | 2024-07-02 | by ( Stacy Cowley | ) www.nytimes.com time to read: 1 min

After an unprecedented three-year timeout on federal student loan payments because of the pandemic, millions of borrowers began repaying their debt when billing resumed late last year. That reality, along with court decisions that regularly upend the rules, has complicated the government’s efforts to restart its system for collecting the $1.6 trillion it is owed. At the end of March, six months after the hiatus ended, nearly 20 million borrowers were making their payments as scheduled. But almost 19 million were not, leaving their accounts delinquent, in default or still on pause, according to the latest Education Department data. “The nonpayment rate really is emblematic of a system that’s not doing its job,” said Persis Yu, the managing counsel for the Student Borrower Protection Center, an advocacy group.

Persons: ”, Persis Yu Organizations: Education Department, Student, Protection

On Today’s Episode:Weakened Leaders of the West Gather in Italy to Discuss an Unruly World, by Mark Landler and Steven Erlanger171,000 Traveled for Abortions Last Year. See Where They Went., by Molly Cook Escobar, Amy Schoenfeld Walker, Allison McCann, Scott Reinhard and Helmuth RosalesStudent Loan Bills Are Dropping Next Month for Many, but There’s a Hiccup, by Stacy Cowley

Persons: Mark Landler, Steven Erlanger, Molly Cook Escobar, Amy Schoenfeld Walker, Allison McCann, Scott Reinhard, Helmuth Rosales, Stacy Cowley Organizations: Bills Locations: Italy

☆ Consumer Bureau to Create ‘Corporate Offender’ Registry
▼ + stars: | 2024-06-03 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

The Consumer Financial Protection Bureau on Monday finalized a plan to create a public registry of nonbank businesses that have been penalized for violating consumer protection laws, a roster some have called a “rap sheet” for companies. The goal, the consumer bureau said, is to make it easier for consumers, watchdogs and government prosecutors to identify patterns and recurrences. “Too many American families and businesses have been harmed by repeat offenders in a rinse-and-repeat cycle of illegal activity,” Rohit Chopra, the bureau’s director, said at a news conference. “When companies believe that violating the law is more profitable than following it, this totally undermines public trust and harms businesses who are playing by the rules.”The bureau estimates that at least 1,500 and as many as 7,750 companies will be subject to inclusion in the registry. The database will compile orders from state, federal and local governments and courts against companies that have faced sanctions for lawbreaking.

Persons: Rohit Chopra Organizations: Consumer Financial

☆ There’s a Program to Cancel Private Student Debt. Most Don’t Know About It.
▼ + stars: | 2024-05-30 | by ( Stacy Cowley | ) www.nytimes.com time to read: +1 min

More than a million borrowers who were defrauded by for-profit schools have had billions of dollars in federal student loans eliminated through a government aid program. But people with private loans have generally been excluded from any relief — until recently. Navient, a large owner of private student loan debt, has created, but not publicized, a program that allows borrowers to apply to have their loans forgiven. Navient, based in Wilmington, Del., has not publicized the discharge program that helped Ms. Maynard. When asked about the program and the criticisms, a company spokesman said, “Borrowers may contact us at any time, and our advocates can assist.”

Persons: jubilantly, “, ”, Danielle Maynard, Maynard Organizations: New England Institute of Art Locations: Brookline , Mass, Wilmington, Del

☆ What the Supreme Court Ruling Means for Other Consumer Bureau Actions
▼ + stars: | 2024-05-16 | by ( Emily Flitter | Stacy Cowley | ) www.nytimes.com time to read: +1 min

But the ruling falls far short of eliminating the bureau’s legal obstacles. Immediately after the ruling was announced, lawyers for the bureau, which is charged with preventing consumer abuse in the financial industry, began preparing dozens of legal filings to try to unfreeze its activities. Among them are requests to federal judges to end stays on new rules and on subpoenas to financial firms. While the Supreme Court’s ruling should resolve a few of the stays, the bureau will still struggle to overcome other roadblocks. He noted that Justice Samuel A. Alito Jr.’s dissent cited three recent consumer bureau actions that, in Justice Alito’s view, would be “major changes” in consumer protection law.

Persons: ”, Graham Steele, Samuel A, Alito Jr, ’, Alito’s Organizations: Consumer, Treasury Department

☆ Education Department Extends Deadline to Consolidate Loans for Forgiveness
▼ + stars: | 2024-05-15 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

More than two weeks after a deadline passed for federal loan borrowers seeking debt relief, the Education Department has extended the offer, giving millions of borrowers a fresh shot at aid. The department said on Wednesday that borrowers would now have until June 30 to consolidate commercially held education debt under the Federal Family Education Loan Program — loans originally from private lenders — or Perkins loans into new direct loans, which are held by the Education Department. “The department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness,” said James Kvaal, the under secretary of education. The move is part of the Biden administration’s effort to aggressively cancel education debts through longstanding relief programs and by easing bureaucratic barriers. One of the trickiest challenges has been reaching borrowers with loans through the Federal Family Education Loan Program, a lingering vestige of a previous federal student loan system.

Persons: ”, James Kvaal, Biden Organizations: Education Department, Federal Family Education, Federal Family Education Loan Program

☆ New Federal Rule Caps Most Credit Card Late Fees at $8
▼ + stars: | 2024-03-05 | by ( Stacy Cowley | ) www.nytimes.com time to read: +1 min

Millions of Americans could soon see lower credit card bills after a federal rule that caps late fees at $8 a month was finalized on Tuesday by the Consumer Financial Protection Bureau, which estimates that the change will save households $10 billion a year. Late fees have become a major profit source for credit card issuers, generating more than $14 billion in 2022, according to bureau data. A 2010 rule imposed by the Federal Reserve aimed to cap the charges, but allowed adjustments for inflation — a provision card issues have used to raise their fees far beyond the actual costs they incur when payments arrive late, the bureau said. That allowed credit card companies to “harvest billions of dollars in junk fees from American consumers,” said Rohit Chopra, the bureau’s director. It applies only to large issuers that have more than one million open accounts, but the agency estimates that the rule will cover 95 percent of outstanding credit card balances.

Persons: ”, Rohit Chopra, “ Organizations: Consumer Financial Protection Bureau, Federal Reserve

☆ He Grew Up in the Shadow of the ‘Wolf of Wall Street.’ Then He Got Into Debt Settlement.
▼ + stars: | 2024-02-10 | by ( Stacy Cowley | Emma Goldberg | ) www.nytimes.com time to read: +1 min

In the early 1980s, 19-year-old Jordan Belfort — who would go on to become known as the Wolf of Wall Street, a title he bestowed on himself in a tell-all memoir — had a fortuitous encounter on Jones Beach, on Long Island, with another teenager selling ice cream named Stephen Drescher. The two became friends. Prosecutors would later note their shared hustling spirit, a drive for entrepreneurialism that curdled into a drive for grift. Within a few years, Mr. Belfort started building a pump-and-dump stock-scam empire. Mr. Drescher went down not long after, convicted of securities fraud and sent to federal prison for nearly four years.

Persons: Jordan Belfort —, —, Stephen Drescher, Belfort, Drescher, Martin, Mr Organizations: Prosecutors Locations: Jones, Long, Martin Scorsese’s

☆ Edward E. Crutchfield, 82, Banker Whose Deals Reshaped the Industry, Dies
▼ + stars: | 2024-01-25 | by ( Stacy Cowley | ) www.nytimes.com time to read: +1 min

His death was confirmed by his son, Elliott Crutchfield, who said his father had dementia. When Mr. Crutchfield graduated from business school in 1965, he took a job as a credit analyst at First Union bank in Charlotte, N.C. It was the lowest-paying job he was offered but he thought he could move up faster at a smaller bank. He sensed opportunity, he told his family and colleagues, at the bank and in the region. The decision empowered Mr. Crutchfield, by then his bank’s chairman and chief executive, to gobble up rival banks and failed thrifts, transforming First Union into a super-regional bank with thousands of branches throughout the Southeast.

Persons: Edward E, Crutchfield, Eddie ”, Elliott Crutchfield, hunches, ” Organizations: Charlotte, First Union, Union, New York Times Locations: North Carolina, Vero Beach, Fla, Charlotte, N.C, “

☆ Consumer Bureau Proposes Overdraft Fee Limits for Large Banks
▼ + stars: | 2024-01-17 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: 1 min

The Consumer Financial Protection Bureau on Wednesday proposed a rule that would sharply limit overdraft charges at America’s largest banks and credit unions, a change that the agency estimated could save households up to $3.5 billion a year in fees. The proposal, which must go through a comment period and would not take effect until at least late 2025, aims to end the $35 overdraft fee that has become the standard at many banks. The bureau’s rule would give banks a few options for setting a lower fee. They could charge a break-even fee — based on the individual bank’s own costs — or a benchmark fee determined by the bureau. Alternatively, the banks could treat overdrafts as a line of credit and provide the disclosures required by the Truth in Lending Act, including interest rates.

Organizations: Consumer Financial Locations: America’s

☆ Biggest U.S. Banks Earn Billions, Even After Insurance Bill
▼ + stars: | 2024-01-12 | by ( Emily Flitter | Stacy Cowley | ) www.nytimes.com time to read: +1 min

The nation’s largest banks are churning out profits as interest rates remain high, even though the lenders have had to set aside billions of dollars to replenish a deposit insurance fund that was heavily depleted by a crisis among midsize banks last spring. Citigroup, which is in the midst of a global restructuring, reported a net loss of $1.8 billion for the quarter, compared with a profit of $2.5 billion a year earlier. In the last quarter of 2023, JPMorgan earned $9.3 billion, or $3.04 per share, compared with $11 billion a year earlier. A special assessment by the Federal Deposit Insurance Corporation had reduced per-share earnings by 74 cents, the bank said. Analysts had been expecting per-share earnings of around $3.32, so investors considered the bank’s performance to be a win once the F.D.I.C.’s one-time bill of $2.9 billion was taken into account.

Persons: Jane Fraser Organizations: JPMorgan Chase, Bank of America, Citigroup, JPMorgan, Federal Deposit Insurance Corporation Locations: Wells, Russia, Argentina

☆ How Millions of Borrowers Got $127 Billion in Student Loans Canceled
▼ + stars: | 2023-11-11 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

When the Supreme Court struck down President Biden’s $400 billion plan to forgive up to $20,000 in federal student loan debt for 43 million borrowers, the prospect of substantive debt relief appeared to vanish. But then millions of borrowers received surprise notices that their federal student loans were being eliminated through other government relief programs. The Biden administration has wiped out loans totaling $127 billion for 3.6 million borrowers — the biggest wave of student debt cancellation since the government began backing educational loans more than 60 years ago. The Education Department is the largest lender for Americans who borrow for higher education, and 43 million borrowers currently owe the government $1.6 trillion. Here are the four largest programs being used to eliminate loan debts — and how five borrowers benefited from them.

Persons: Biden’s, Biden Organizations: The Education Department, Education Department, —

☆ Consumer Bureau Seeks to Supervise Digital Payment Apps
▼ + stars: | 2023-11-07 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

The Consumer Financial Protection Bureau wants to extend its watchdog powers to cover digital wallets and payment apps run by companies like Apple, Google, PayPal and Block, which do not have traditional banking operations. The bureau proposed a rule on Tuesday that would subject large companies — those that process more than five million financial transactions per year — to the same supervisory examinations the bureau conducts on banks and credit unions. “Payment systems are critical infrastructure for our economy,” said Rohit Chopra, the bureau’s director. “Today’s rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight.”The proposed rule could take effect as soon as next year. One of the payment industry’s largest trade groups, the Electronic Transactions Association, had a fairly mild response to the proposal.

Persons: ”, Rohit Chopra, “ Organizations: Consumer Financial, Apple, Google, PayPal, Electronic Transactions Locations: United States

☆ Cyberattack Disrupts Mortgage Payments for Millions of Mr. Cooper Customers
▼ + stars: | 2023-11-07 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

Mr. Cooper, one of America’s largest nonbank mortgage loan servicers, suffered a cyberattack last week that disrupted loan payments and other transactions for millions of customers. The company, based in Coppell, Texas, said in a regulatory filing last week that it was attacked on Oct. 31. A notice on its website said Mr. Cooper “took immediate steps to lock down our systems” — which prevented customers from making online loan payments or gaining access to their account information. The company said Monday afternoon that it had restored its system for accepting online payments. The notice also pointed customers toward options for making payments by phone, mail, Western Union or MoneyGram.

Persons: Cooper, Cooper “, “ Mr, ” Organizations: Western Locations: Coppell , Texas, Western Union

☆ Former Wells Fargo Executive Avoids Prison in Sham Accounts Scandal
▼ + stars: | 2023-09-15 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

A former top Wells Fargo executive avoided prison time for her role in the bank’s sham accounts scandal, after a federal judge on Friday instead sentenced her to six months of home confinement and three years of probation. She is also ordered to pay a $100,000 fine and perform 120 hours of community service. The former executive, Carrie L. Tolstedt, who was head of retail banking at Wells Fargo, was the only high-ranking executive at the bank to be criminally charged for its misdeeds. She plead guilty this year to one criminal charge of obstructing a bank examination. Prosecutors had sought a 12-month prison sentence, saying in a legal filing that imprisoning Ms. Tolstedt, 63, would be a “general deterrence to other executives who might find themselves tempted to skirt the truth.”Ms. Tolstedt’s lawyers had pressed for probation, citing similar sentences in other cases and invoking Ms. Tolstedt’s “lifelong charitable works.” Both the prosecution and the defense also cited Ms. Tolstedt’s health issues, the details of which had been redacted from the public versions of legal filings, as a factor favoring leniency.

Persons: Carrie L, Tolstedt, Prosecutors, Ms, Tolstedt’s Organizations: Wells Locations: Wells Fargo

This spring, Clive Kabatznik, an investor in Florida, called his local Bank of America representative to discuss a big money transfer he was planning to make. Rather, a software program had artificially generated his voice and tried to trick the banker into moving the money elsewhere. Mr. Kabatznik and his banker were the targets of a cutting-edge scam attempt that has grabbed the attention of cybersecurity experts: the use of artificial intelligence to generate voice deepfakes, or vocal renditions that mimic real people’s voices. The problem is still new enough that there is no comprehensive accounting of how often it happens. Another large voice authentication vendor, Nuance, saw its first successful deepfake attack on a financial services client late last year.

Persons: Clive Kabatznik, Kabatznik Organizations: Bank of America Locations: Florida

☆ Analysis Says Biden’s New Student Debt Plan Could Cost $475 Billion
▼ + stars: | 2023-07-19 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

President Biden’s new repayment plan for federal student loans will cost the government $475 billion over the next decade, according to a new economic projection. The updated income-driven repayment plan would surpass the $400 billion cost of the debt forgiveness plan that the Supreme Court rejected last month. But a new and revised plan, which the administration has named Saving on a Valuable Education, or SAVE, is vastly more generous. That means the government, not borrowers, will ultimately pay a bigger share of the recipients’ educational costs. Economists for the University of Pennsylvania’s Penn Wharton Budget Model, a nonpartisan research group, estimate that payment reductions in the $1.6 trillion in outstanding federal student loans will cost the government $200 billion.

Persons: Biden’s, —, University of Pennsylvania’s Penn Organizations: Education Department, Valuable Education, University of Pennsylvania’s, Budget

☆ Bank of America Reports Big Profit Jump on Higher Interest Rates
▼ + stars: | 2023-07-18 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +3 min

The NumbersBank of America reported a profit of $7.4 billion last quarter, up nearly 20 percent from the year before. Revenue grew more than 10 percent, to $25.2 billion in the second quarter. Customer spending on credit and debit cards rose 3 percent, to $226 billion, the bank said. Notably, the lender’s investment-banking business rebounded in the second quarter, after a sharp drop in deal-making had cast a chill over the industry. Last week, Bank of America was fined $150 million by two federal regulators for charging its customers improper fees and denying them promised sign-up bonuses.

Persons: Mr, Borthwick, Takeaways Brian Moynihan, “, ”, “ That’s, Alastair Borthwick, “ We’ve, that’s, Wells Fargo, Banks, Goldman Sachs, They’ll Organizations: Bank of America, Revenue, Citigroup, JPMorgan Chase, Federal Deposit Insurance Corporation, Western Alliance Locations: U.S

Jamie Dimon, the bank’s chief executive, has deep political connections, and his prognostications on the economy are scrutinized in some circles as closely as a central banker’s musings. The U.S. economy “continues to perform better than many had expected,” said Charles W. Scharf, the bank’s chief executive. Unlike the other banks, Citigroup reported a fall in second-quarter profit, although the decline was not as severe as analysts had predicted. The U.S. government debt-limit standoff in April and May was also reflected in the banks’ results, with Citi citing anxiety during the negotiations as pushing investment-banking clients to the “sidelines” during the second quarter. What’s NextIn the next week or so, a slew of other banks will report quarterly earnings.

Persons: Jamie Dimon, Dimon, didn’t, ”, Wells, “, Charles W, Scharf, Jane Fraser, Goldman Sachs Organizations: JPMorgan, Treasury, Citigroup, Citi, Western Alliance and Comerica Locations: U.S, Wells Fargo, Republic

☆ Wells Fargo Beats Expectations but Sets Aside Money for Loan Losses
▼ + stars: | 2023-07-14 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

Why It MattersWells Fargo is one of the nation’s largest mortgage lenders, and analysts watch its results for signs of economic stress. The bank’s soured loans in its commercial business grew, but its consumer business held fairly steady, with a slight rise in credit-card defaults offset by a drop in losses on auto loans. Commercial real estate, especially loans on office space, are a pain point, and the bank set aside nearly $1 billion more for losses. Commercial deposits have stabilized, while on the consumer side, “what’s driving the decline is, largely, people spending their money,” said Michael P. Santomassimo, the bank’s chief financial officer. What’s NextLike the other big banks, Wells Fargo keeps bracing for a recession — but not seeing one just yet.

Persons: Wells, “, ”, Charles W, Scharf, what’s, Michael P, Santomassimo, Mr, Morgan Stanley, Goldman Sachs Organizations: Federal Reserve, Bank of America Locations: U.S, Wells, “

☆ Education Department Cancels $39 Billion in Student Debt for 800,000 Borrowers
▼ + stars: | 2023-07-14 | by ( Stacy Cowley | More About Stacy Cowley | ) www.nytimes.com time to read: +1 min

More than 800,000 borrowers will have $39 billion in federal student loan debt eliminated under a government effort to remedy years of mistakes by the loan servicers that collect payments on the government’s behalf. The relief will go to those with federal loans owned directly by the Education Department and who enrolled in income-driven repayment plans. Under those plans, borrowers must make payments for a term that is typically 20 or 25 years. More than eight million people use income-driven repayment plans, but for decades, many of the companies that bill borrowers made extensive mistakes in tracking payments and in guiding borrowers through the payment process. “For far too long, borrowers fell through the cracks of a broken system,” Miguel Cardona, the education secretary, said on Friday.

Persons: ” Miguel Cardona Organizations: Education Department

Last week, the Supreme Court struck down President Biden’s sweeping plan to cancel billions of dollars in student loan debt. Stacy Cowley, a finance reporter for The New York Times, explains what the decision means for borrowers now facing their first payments since a coronavirus pandemic-related pause and how an alternative plan could still ease their burden.

Persons: Biden’s, Stacy Cowley Organizations: The New York Times

Georgetown University in Washington, D.C. Not everyone with debt would have been covered under the Biden administration’s student loan forgiveness plan. The Supreme Court has barred the Biden administration from carrying out its plan to extinguish up to $20,000 in federal student loan debt, and millions of borrowers will continue to struggle under the weight of their loans. Ms. Schmidt owes $64,000 in student debt, more than half of which is for her graduate work in nursing. But she’s already contemplating how she’ll finance her dream of becoming a civil rights lawyer, which typically requires an additional six figures in student debt. Yet her mother is still paying down student debt of her own.

Persons: Biden, Gina McDavitt, weren’t, Pell, “, ”, McDavitt, ” Ms, Ms, Monica Schmidt, Schmidt, Kevin Serna, Dorien Rogers, Rogers, Asha Anthony, she’s, —, Anthony, Mr, don’t, Joanna Leiserson, Brian Kaiser, “ I’m, Leiserson Organizations: Georgetown University, Biden, College of San, San Francisco State University, The New York Times, University of Phoenix, Northern Illinois University, Public, Schaun, Tax, Howard University, Salisbury University, The New York, Republicans Locations: Washington ,, College of San Mateo, Bay, Vallejo , Calif, Genoa, Ill, Germantown, Md, Credit, Montgomery County, Mesa, Maryland, Spokane, —, forbearance

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